CBRE Brokers FDIC’s $24.8M Sale of Former Condos to Tax Credit Housing Developer
- Aug 13, 2010
Silver Spring, Md.‑CB Richard Ellis Group arranged the sale of the Argent, a 96-unit 91,483 square foot mid-rise apartment complex located at 1200 Blair Mill Road in Silver Spring, Md.
Blair Mill Affordable Associates LLC, an affiliate of Pallas Properties LLC and Paradigm Financial Consulting of Park City, Utah, purchased the property from 1200 BMR Associates LLC, for $24.8 million.
The CB Richard Ellis Washington DC Multi-Housing Investment Properties Group of Bill Roohan, Mike Muldowney, Andrew Boyer, Michael Rudolph, Jonathan Greenberg, Brian Margerum and Martha Hastings brokered the transaction.
“Originally built as for-sale condominiums, the property was unsuccessful in selling the units. Chicago-based Corus Bank (which was taken over by the FDIC in September of 2009) originally financed the construction of the improvements. Ultimately, a partnership between the FDIC and a private equity consortium led by Starwood Capital Group took over the loan and helped facilitate the sale of the property,” says Bill Roohan, vice chairman, CB Richard Ellis, who heads the firm’s Multi-Housing Group in the Washington-Baltimore region.
The property was purchased utilizing tax exempt municipal bonds and equity provided by Bank of America Merrill Lynch through the purchase of Federal Low-Income Housing Tax Credits. The property will now be designated as an Affordable Housing property with 90 percent of the units at the property being set aside for qualifying families whose income does not exceed 60 percent of the Area Median Income and 10 percent of the units at the property set aside for qualifying families whose income does not exceed 50 percent of the Area Median Income.
Completed in 2009, the units in the nine-story property feature condo-quality amenities that include gourmet island kitchens with granite counter tops, stainless steel finishes and ceramic tile floors, hardwood floors throughout, a rooftop terrace and underground parking. The property is located within walking distance of the Silver Spring Metro and is a 13-minute ride to downtown Washington, DC.
“We are delighted that Pallas Properties was able to structure the acquisition of this high quality asset, in a fabulous up-scale location, in a manner such that the rental rates offered to qualifying families will be truly affordable to low and moderate income families, says Stan Herskovitz, Principal of Paradigm Financial Consulting, and manager of the owner and of Pallas Properties.
Christopher Long, senior vice president at Bank of America Merrill Lynch states that “Bank of America is honored to provide Pallas Properties and the Argent more than $12 million in equity financing. This investment, a unique adaption of high quality existing condominiums, creates homes for 96 low- and moderate-income individuals and families. As a leader in providing financing for affordable housing, we are continually looking for new ways to meet this great need in our communities.”